ACCC to fight tech vendors

ACCC chairman Rod Sims has urged consumers and businesses to complain to the regulator when they believe foreign companies are being unreasonable in charging higher prices for their goods in Australia.
Photo: Jim Rice

The competition regulator has threatened to pursue technology vendors making false claims to support charging higher prices for goods in Australia than overseas.

In an exclusive interview with The Australian Financial Review, Australian Competition and Consumer Commission chairman
Rod Sims
urged consumers and businesses to complain to the regulator when they believed foreign companies were being unreasonable in charging higher prices for their goods in Australia.

Companies like Apple, Microsoft and software vendor Adobe are the targets of a parliamentary inquiry investigating IT pricing discrepancies. The committee is looking into whether to introduce regulation or change legislation to force down local pricing for technology products, which consumer group Choice says can exceed equivalent US pricing by as much as 50 per cent.

Treasury warned last week that any moves to regulate IT pricing would stifle innovation.

Vendor industry groups have blamed Australian pricing on taxes such as the GST and regulatory requirements such as the need to comply with warranty requirements governed by the ACCC.

Labour costs alone could feed into a 121 per cent cost rise compared to the US, the group said.

But the ACCC will investigate any claims it finds suspicious.

“If we can find one where we think the representation made looks to be significantly divorced from reality and we think it’s one of general use, then we’ll certainly take action," Mr Sims said.

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“If somebody mentioned all these labour costs and variables but the price difference was only 30 per cent, I’d say it’s possible, whereas if the price difference is 300 per cent, then it’s a different matter."

Committee chairman Nick Champion welcomed an investigation by the ACCC as “positive and encouraging for consumers".

Mr Sims said although ACCC investigations began before the parliamentary inquiry, they had been boosted by public interest in the case. The commission has been sifting through the 96 submissions to the inquiry, many of which offer pricing comparisons between Australia, the United States and Britain.

While the commission is unable to pursue technology vendors purely because they charge higher prices locally than overseas, it has previously taken action against technology vendors believed to be acting anti-competitively or in collusion with other companies to keep prices high.

Earlier this year the commission took Apple to court over claims the third-generation tablet was compatible with 4G mobile networks in Australia. The US vendor agreed to clarify its marketing campaigns globally, and paid a $2.25 million fine.

“We’re not here to take things on that are marginal; we’d need to take something on and say, ‘we think this would make a difference to Australian users and we think it’s fairly blatant behaviour’," Mr Sims said.

But the commission has received few complaints to date about IT pricing, largely as a result of consumers unsure about what the government organisation could do to fix the issue.

Though the ACCC can act without complaint, Mr Sims said the commission was hoping to gather as much information as possible to ensure it has the strongest case.

“My hope is that as technology improves, as business systems improve and as consumers start asking the questions, the ability of companies to blatantly discriminate against Australia will come under so much pressure that it will fall away," Mr Sims said.

“But it will take a bit of time because the core problem is it’s not against the act to charge more in Australia than it is overseas."